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  • BC-8.8 BC-8.8 Disclosure of Information

    • Applicability

      • BC-8.8.1

        This Section applies to conventional bank licensees in relation to their dealings with all categories of customers, except when stated otherwise.

        Added: April 2008

    • Initial Disclosure Requirement

      • BC-8.8.2

        A conventional bank licensee must provide (with respect to regulated banking services), comprehensible information to customers or potential customers on:

        a) Itself and the types of services that it can provide;
        b) Whether it is acting as agent or principal;
        c) Fees, costs and associated charges payable by the customer such as:
        i. The basis or amount of its charges, remuneration and commission for conducting regulated financial services and
        ii. The nature or amount of any other income receivable by it or, to its knowledge, by its associate and attributable to that regulated banking service;
        d) Financial instruments and proposed strategies and appropriate guidance on and warnings of the risks associated with those financial instruments and strategies; and
        e) Information about methods of redress.

        Added: April 2008

      • BC-8.8.3

        The purpose of Paragraph BC-8.8.2 is to ensure that customers are reasonably able to understand the nature and risks of the investment service and type of financial instrument that is being offered and, consequently, to take investment decisions on an informed basis. This information may be provided in standard format.

        Amended: January 2011
        Added: April 2008

    • Risks

      • BC-8.8.4

        Conventional bank licensees must disclose adequate information to all classes of customers about risks underlying the financial instrument that are not readily apparent and which relate to the regulated banking service being provided.

        Added: April 2008

      • BC-8.8.5

        Without prejudice to the scope of the requirement under Rule BC-8.8.2(c), conventional bank licensees must provide retail customers with appropriate guidance on, and warnings of, relevant risks when providing regulated banking services, in relation to:

        (a) Transactions in illiquid financial instruments;
        (b) Leveraged transactions, including asset portfolios or collective investment schemes that have embedded leverage;
        (c) Financial instruments subject to high volatility in normal market conditions;
        (d) Securities repurchase agreements or securities lending agreements;
        (e) Transactions which involve credit, margin payments, or deposit of collateral;
        (f) Transactions involving material foreign exchange risk;
        (g) Interests in real estate; and/or
        (h) Islamic financial instruments.
        Amended: January 2011
        Added: April 2008

      • BC-8.8.6

        In relation to transactions involving warrants or derivatives, conventional bank licensees must provide retail customers with a written statement that includes explanations of their characteristics, in particular their leverage effect, liquidity and price volatility.

        Added: April 2008

      • BC-8.8.7

        To satisfy Rule BC-8.8.6, with respect to warrants, conventional bank licensees should provide retail customers with a statement that includes, at a minimum, the information contained in Paragraph BC-8.13.3.

        Added: April 2008

      • BC-8.8.8

        To satisfy Rule BC-8.8.6, with respect to futures contracts, conventional bank licensees should provide retail customers with a statement that includes, at a minimum, the information contained in Paragraph BC-8.13.4.

        Added: April 2008

      • BC-8.8.9

        To satisfy Rule BC-8.8.6, with respect to option transactions, conventional bank licensees should provide retail customers with a statement that includes, at a minimum, the information contained in Paragraphs BC-8.13.5 and BC-8.13.6.

        Added: April 2008

      • BC-8.8.10

        In relation to a transaction in a financial instrument that is not readily realisable, conventional bank licensees must:

        (a) Warn the retail customer that there is a restricted market for such financial instruments, and that it may therefore be difficult to deal in the financial instrument or to obtain reliable information about its value; and
        (b) Disclose any position knowingly held by the conventional bank licensee or any of its associates in the financial instrument or in a related financial instrument.

        Added: April 2008

      • BC-8.8.11

        The risk warning given to a retail customer or potential retail customer must be given due prominence in all related materials and must not be concealed or masked in any way by the wording, design or format of the information provided.

        Added: April 2008

      • BC-8.8.12

        Risk warnings provided to a retail customer or potential retail customer about warrants or derivatives must make clear that the instrument can be subject to sudden and sharp falls in value. Where the retail customer may not only lose his entire investment but may also be required to pay more later, he must also be warned about this fact and the possible obligation to provide extra funding.

        Added: April 2008

    • Cancellations and Withdrawals

      • BC-8.8.13

        Conventional bank licensees must disclose in their terms of business the existence or absence of a right to cancel as per the provisions of Paragraph BC-8.6.2.

        Added: April 2008

      • BC-8.8.14

        Conventional bank licensees must pay due regard to the interests of their customers and treat them fairly.

        Added: April 2008

    • Records

      • BC-8.8.15

        Conventional bank licensees must keep a record of statements issued in compliance with Rule BC-8.8.6, and of other information or recommendations provided to their customers, and be able to demonstrate to the CBB compliance with this Section.

        Added: April 2008